Watson Announces Agreement to Acquire U.S. Rights to Columbia Laboratories' CRINONE Progesterone Gel Product Line
Watson Pharmaceuticals, Inc. has announced an agreement to expand their Women's Health brand product portfolio with the acquisition of the exclusive U.S. rights to Columbia Laboratories, Inc.'s bioadhesive progesterone gel products currently marketed under the trade names CRINONE® and PROCHIEVE® for the indications of infertility and secondary amenorrhea. The two companies will collaborate in the ongoing Phase 3 development program toward a new indication for these products for the prevention of preterm birth in women with a short cervix, as well as a global development program for second-generation products for this indication and infertility. Watson will also acquire 11.2 million shares of Columbia common stock.
The acquisition is subject to customary closing conditions, including the approval of Columbia's stockholders. The closing of the acquisition is expected to occur in the second quarter of 2010. After the close of the acquisition, Watson intends to immediately begin marketing CRINONE® and PROCHIEVE® in the U.S. to reproductive endocrinologists and Ob/Gyns through the existing Brand Sales Forces.
Under the terms of the agreement, Watson will provide Columbia with an initial $47 million payment and will receive exclusive progesterone gel product rights in the U.S. and 11.2 million newly issued shares of Columbia common stock. Watson will also have the right to designate a member of Columbia's board of directors. Additional contingent payments related to the successful completion of clinical development milestones, receipt of regulatory approvals and product launches could total approximately up to $45.5 million. Watson will also pay Columbia a royalty on Watson's sales of the progesterone gel product and any next generation products. Columbia will be responsible for the anticipated clinical and regulatory costs related to obtaining approval for the progesterone gel product for prevention of preterm birth in women with a short cervix. Excess development costs over a defined cap, if any, as well as costs related to the development of the second generation product will be the responsibility of Watson. Pursuant to a supply agreement, Columbia will be responsible for manufacturing the progesterone gel products.
"The addition of CRINONE® and PROCHIEVE® demonstrates our commitment to expand our emerging position in distinctive women's healthcare products. It builds on a portfolio of products used by the Ob/Gyn that currently includes our GELNIQUE® (oxybutynin chloride) gel treatment for overactive bladder (OAB) and FEMRING® (estradiol acetate) vaginal ring hormone replacement therapy. It also provides a stronger market foundation for the portfolio of women's health products in development, including URACYST®, under development for cystitis, a new emergency contraceptive, a novel oral contraceptive and two additional unique contraceptives currently in Phase 3," said Paul Bisaro, Watson's President and Chief Executive Officer. "CRINONE® has a proven record in infertility, and we are confident in our ability to expand its acceptance using our specialty Ob/Gyn sales team. In addition, if we are successful in receiving FDA approval for a new preterm birth indication, we will have the opportunity to create a new market and address a significant and unmet medical need."
CRINONE® is currently used for progesterone supplementation or replacement as part of an Assisted Reproductive Technology (ART) treatment for infertile women with a progesterone deficiency. Patient preference for CRINONE® has been demonstrated in five clinical trials. The product is also available under the trade name PROCHIEVE®.
A Phase 3 clinical program is currently underway in collaboration with the National Institutes of Health (NIH) to evaluate the safety and efficacy of PROCHIEVE® for the prevention of preterm birth in women with a short cervix. Preterm birth occurs in one of every eight live born infants, and short cervix is the single most important predictor of preterm birth. There are currently no products approved for the prevention of preterm birth.